Diamer-Bhasha: WB links dam’s funding to Indian agreement
By Shahbaz Rana
Published: June 26, 2012
The project is expected to generate 4500 megawatts of electricity besides storing water for agriculture purposes once completed. DESIGN: ALI DARAB & JAMAL KHURSHID
ISLAMABAD: Amidst strained relations with the US, Pakistan was unable to obtain a positive response from Washington-based World Bank to help finance the $11.7 billion Diamer-Bhasha dam project.
Sources in the ministry of finance revealed that the World Bank has again linked the financing of the multi-billion dollar project with Indian concurrence. Pakistan was unable to receive a firm commitment from World Bank’s Vice President for South Asia Isabel Guerrero to co-finance the mega project when Finance Minister Dr Abdul Hafeez Shaikh met with the former on Monday.
Sources added that Shaikh raised the issue of financing the dam with the vice president but could not get a “welcoming response”.
Earlier, the government had claimed that the World Bank has agreed in principle to finance the project. The breakthrough was achieved during Shaikh’s meetings with top officials of the international lending agency during his visit to Washington.
Officials are attributing the bank’s retraction and change of heart to the strained relationship that Islamabad and Washington have witnessed of late. Some sources said that the World Bank has linked the financing of the dam with Indian concurrence for the project — given India’s opposition to the dam on claims that it is located in the disputed territory of Gilgit-Baltistan.
Insiders insisted that the US has given assurances that it will ask the World Bank to finance the project but the promise remains unfulfilled. “We have come to the conclusion that the issue of the financing of the dam by the World Bank can only be resolved during strategic discussions with the US,” an official said.
The US enjoys immense clout over the working of the international bank given that it is the largest fund provider and also holds the presidency of the multilateral lending agency.
The finance minister also asked the World Bank to restore its budgetary support that remained suspended due to deterioration in key macroeconomic indicators of the country. However, the government could not get encouraging response on that front either.
The Asian Development Bank (ADB) is expected to be the lead financer of the project that is expected to generate 4500 megawatts of electricity besides storing water for agriculture purposes once completed.
Although the ADB has yet to formally announce the exact numbers despite forcing the government to agree to various conditions, Pakistan is expecting to receive around $4 to $4.5 billion.
In a bid to avoid any dispute, the ADB has compelled the government to offer compensation of international standards which increased the cost of land acquisition. The fresh cost of land acquisition has been worked out at Rs116.4 billion, according to the Planning Commission document. However, the government has allocated only Rs7.8 billion for the next year expecting little progress on the dam due to financing bottlenecks. ADB’s new Director General for South and West Asia Klaus Gerhaeusser is also coming to Islamabad on a one-day visit to discuss issues relating to the financing of energy sector projects, primarily the Diamer-Bhasha dam, said sources.
He is slated to hold meetings with Shaikh, Minister for Water and Power Chaudhry Ahmad Mukhtar and Wapda Chairman Shakil Durrani.
Affectees stopped construction
Meanwhile, hundreds of people likely to be displaced by the construction of the dam in Chilas intervened and forcefully stopped the work on the model villages, threatening that they would not let the work start unless the government gives them a payment of compensation.
According to the residents of Chilas, hundreds of people went to Harpan Das where construction work on model villages was underway. “They were demanding assurance from the government to pay them compensation in return for their land,” a resident of Chilas said on Monday.
The protestors later gathered into a rally and complained that while people of Chilas were facing displacement, authorities were busy making money.
The construction work had been suspended till the filing of this report.
(WITH ADDITIONAL INPUT BY SHABBIR MIR FROM GILGIT)
Published In The Express Tribune, June 26th, 2012.
Diamer-bhasha: Wb Links Damís Funding To Indian Agreement
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Posted 26 June 2012 - 06:04 AM
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